Car Lease vs. Buy Calculator
Compare the total cost of ownership to find the best financial path for your next vehicle.
Financing (Buying)
Leasing
Total Cost to Buy
$0
Total Cost to Lease
$0
Understanding the Lease vs. Buy Decision
Deciding whether to lease or buy a car is a major financial crossroads. While leasing offers lower monthly payments and the chance to drive a new car every few years, buying builds equity and eventually eliminates monthly payments altogether. This calculator compares the Net Cost of Ownership over the duration of your term.
How We Calculate the Costs
To provide an apples-to-apples comparison, we look at the total cash out of your pocket minus any value left in the asset:
- Buying: We calculate your monthly loan payments based on the interest rate and term. The total cost includes your down payment, all monthly payments, and sales tax, minus the estimated resale value of the car when the loan is finished.
- Leasing: This is simpler but often more expensive in the long run. We sum up your monthly payments, the amount due at signing (down payment), acquisition fees, and the disposition fee charged when you return the vehicle.
Example Comparison
Imagine a $35,000 SUV. If you buy it with $5,000 down at 5.5% for 60 months, your payment is roughly $573. Over 5 years, you spend about $39,380. If the car is worth $15,000 at the end, your net cost is $24,380.
If you lease that same car for 36 months at $450/month with $3,000 down, you spend $19,200 over 3 years. However, to compare this to the 5-year buying cycle, you would likely start a second lease, which often makes leasing more expensive over long periods.
Pros of Buying
- Ownership: You own the asset once the loan is paid.
- No Mileage Limits: Drive as much as you want without penalties.
- Customization: You can modify the car as you wish.
Pros of Leasing
- Lower Payments: Monthly costs are usually 30-50% lower than financing.
- New Technology: You always have the latest safety features and infotainment.
- Warranty Coverage: Most lease terms match the manufacturer's bumper-to-bumper warranty.